Cash starved and broke government of Kenya now plans to borrow KSh 80 Billion in a syndicated loan even before the dust settles on how KSh 200 Billion that was borrowed last year was used.
Should everything go as planned, the money may be raised by early November 2015 as an answer to the serious financial crunch currently facing the government.
It is understood that the National Treasury is in talks with three banks, namely Citibank, Standard Chartered and Stanbic for the emergency funds.
"We expect the government to continue with its effort to step up both domestic and foreign borrowing. The success of foreign borrowing may lead to a temporary reduction of pressure on local interest rates environment. However, we maintain our view that investors should be biased towards short-term fixed income instruments due to the uncertainty of the rate environment," according to analysts at Cytonn Investments.
In the 2015/16 financial year budget, the country anticipates to borrow a total of KSh 340 Billion in foreign loans.
This move comes even as the government plans to float a KSh 20 Billion bond on October 26, 2015 to fix a budget deficit as interest rates in the market remain high. A similar bond a week earlier offered a return of 21.498 %.
In September 2015, the government also offered another one year bond of KSh 30 billion. This auction offered a 19 % yield. This month, the government plans to offer a KSh 5 billion bond, which will be offered through its M-Akiiba platform and will attract investors with as little as KSh 3,000.
No comments:
Post a Comment